Change the grid, not the customer?

Industry veteran suggests emphasis on utility side

Steve Collier, an electrical engineer and IEEE smart grid "expert" (so designated due to his experience with the grid and the new technologies being applied to it), has worked in many roles in the power, telecom and software industries. We talked earlier this month about a few issues in grid modernization.

Intelligent Utility: Your position is that the utility industry ought to focus more on wringing efficiencies from the grid than just going to the residential homeowner and small business looking for behavioral changes around peak use. What's your thinking?

Steve Collier: We should tackle why the grid is inadequate rather than just trying to change customers' expectations and behavior to accommodate its deficiencies. The recent wind-caused outages in the East are a case in point. Critical peak pricing and demand response provided no benefit. A smarter grid would have.

In the last 10 years or so, as documented in the U.S Department of Energy electric grid adequacy report, "Keeping the Lights On in the 21st Century," it has become clear that the existing grid and historical utility behavior will no longer suffice.

So we ask consumers to get smart because we've got a grid that's not? I think that most customers really have little interest in spending much time or effort changing how and when they use electricity. We should be concentrating more on what can be done on the utility's side of the meter instead of expecting the customers to do it all.

We need a smarter grid enabled by advanced sensors and controls and new planning and operating methods, not just accommodations by customers.

IU: Sensors and controls that automate the grid to the extent possible really are part and parcel of "smart grid," which is about extending intelligence down to the distribution system. I buy that. Don't some of those sensors and controls also benefit the customer, directly and indirectly?

Collier: You're right, there are many benefits to be gained from a smarter grid that is being monitored, analyzed and controlled in real time. And automation is the key. Many utilities and their customers are seeing benefits in automated outage management systems. A few utilities are improving efficiency through voltage optimization. Some smart meters can actually provide data that is useful for these kinds of applications. Unfortunately, though, most of the so-called smart meters really aren't. We need meters that respond automatically to price signals, power quality and reliability.

Ultimately I think a lot of these features and functions will be built directly into end-use devices. Moore's Law means that electronics are getting better and cheaper. And the Internet means everybody and everything will be in constant two-way, fast digital communications everywhere in the world.

The secret here is not rates that customers react to; it's rates and other parameters that devices react to in an "Internet of Things." You should be able to buy a black box and plug it into your Internet of things and all of a sudden a customer's appliances, rooftop photovoltaics, electric vehicle are all automatically reacting to price signals or the availability of wind generation or utility dispatch and control signals. These devices would be managed through the mobile devices that they are accustomed to using for everything else.

IU: Meanwhile, how do you see the path ahead for grid modernization, for what utilities can and should do to make existing infrastructure more efficient and resilient, while the industry works towards that future vision of de-centralization and automation?

Collier: There will obviously be a transition. We cannot transform the world's largest and most complex infrastructure overnight. But we must change our thinking about how we plan, construct and operate the grid in a new reality. And we can almost immediately improve economy, efficiency, reliability and customer service through a smarter grid. There are parallel paths here. One is the steady state path. What do we do today in day-to-day normal operating conditions? And what do we do to deal with emergency circumstances when we have straight-line winds for three hours that knock down power lines and trees or when an employee's mistake takes down the grid in Southern California and Arizona for a couple of days?

In the steady state, we are seeing emerging strategies such as distributed, automated energy management systems, demand reduction and conservations through voltage/VAR control and advanced asset management enabled by sensors and controls. We're even moving toward anticipating faults by reading subtleties in power quality in real-time. In responding to service interruptions and power quality problems, advanced sensors and controls and decision software allow us to serve customers better. We can isolate faults and re-route power to minimize impacts and restore service more quickly. Automated outage management systems can define and locate the problem more quickly and allow utilities to communicate estimated time to restoration to customers to reduce hardships and allow them to plan. Undergrounding needs another look, especially to see if costs could be lowered. Ultimately, we're looking at a decentralized grid for resiliency. That'll take time. Many forces are pushing changes in the utility business model and that's just one.

Comments

Great Insights....but

- Jul 17, 2012 - 9:00 PM

....one of the take-aways has to be that "we" have spent ginormous sums of money on installed "smart grid" hardware and did so without a clear strategy for the use. I will again blame the "genius" of distributing stimulus money toward an initiative that wasn't even a fully formed concept. In fact, I think it's clear that the concepts are still "evolving" and are still being outpaced by hardware installations.

Timely Article

- Jul 17, 2012 - 11:24 AM

This is a timely article especially with all the recent electric
grid outages.Even with the market rush
by companies to be at the front of the “Smart Grid” movement recent events show
there are many heads to the dragon that can burn you.The internet and the electric grid are services
that stay in the background until they fail.When that happens, life for most people stops until the service is
repaired and turned back on.The
internet unlike the electric grid does not turn off all the basic comfort of
life and thus the electric grid has a much more critical impact when it fails.

There are many redundant and robust pieces if equipment on
the electric grid today that have contributed to its reliable over the years.I
agree that there is a need for more and better sensors on the electric grid and
even more important is a need of our ability to decode and understand what
those sensors are telling us about the grid.This learning curve is still in its infancy.Most new digital meters are smarter than the
communication technologies used to make the connection to the electric meters.The communication designers have had to make
trade-offs when they implement their technologies onto electric meters and many
times those trade-offs cause more problems than they solve.

The opportunity to improve the grid with technology as well
as educate the end customers on their usage still exists and is very much desirable.This is the two prong attack that is underway
today and needs to continue.As with any
new technology, the benefits gained by the new systems comes first to the
implementer of the technology and then to the end customers.The implementers are still struggling with
all the data from the meters and how to process and handle it.They have only scratched the surface so far
and outage notification is one of the easiest to implement with the technology.The prediction and intervention of pending
grid failures is still very new or not yet on the radar screen for most.When we move the technology in that
direction, it will become a benefit to the utilities as well as the end
customers because potential outages can be averted before they cause
problems.We are getting there, but
still a few years away.

Timely Article

- Jul 17, 2012 - 8:42 PM

Richard,

Thanks for taking the time to read the interview and to provide thoughtful comments. There's a reason that Phil and I ended our title with a question mark rather than an exclamation mark. We wanted to stimulate discussion rather than proclaim that nothing should be done about conservation, efficiency or demand control on the customer's side of the meter. I absolutely agree that anything that can be done by consumers to use electricity more efficiently is desirable. There must be strategies for both sides of the meter, but they should be strategic and faciliated by the utilities and regulators in ways that don't stress or inconvenience consumers. I'm not convinced that the inadequacies of the grid should be the basis for pressuring them with price signals or otherwise to use energy substantially differently than they want to. This may be required in the short term, but is not an ideal outcome. In my mind it is just a mild version of rotating blackouts and brownouts, only based on a price signal? The ready availability of economical, reliable and safe electric energy has largely made our quality of life and productivity of business what it is today. And, in fact, I think that there is can be an unanticipated outcome of efficiency acording to the Jevons Paradox (or the more modern interpretation in the Khazzooh - Brookes Postulate) that has been in public discussion quite a bit of late. We need to be transforming the grid to be adequate for consumers wants and needs, not transforming consumers to the grid's inadequacies.

Steve,
I agree the focus

- Jul 21, 2012 - 10:09 AM

Steve,
I agree the focus needs to be on making things as transparent to the consumer as possible. Forced price signals along with threatened blackouts are not the way to get consumers to change habits. My intent was to say that as the implementers roll out the systems, consumer behavior will change as they learn and understand their true cost of use. I cannot imagine or begin to guess what that will look like any more than the design engineers could when the first PC’s were introduced. For me, this movement will have the same impact or greater on our culture as did the microchip. It will infuse new knowledge into everything we do. My reason for saying this is that most of what we do evolves the use of energy in some form or fashion.
Thanks,
Richard G. Pate
Pate & Associates, Principal
rgpate@pateassociates.com
www.pateassociates.com

Change requirements are not one-sided

- Jul 17, 2012 - 10:19 AM

Phil, Steve - Great interview with lots of interesting perspective. As one of the previous commenters mentioned, the optimal solution is not to just change the grid or to just change the customer. No doubt, utilities must take undertake initiatives on both sodes of the equation. Automation within the grid and hardening of assets is a no-brainer. But we can't lose sight that grid modernization by itself will not mitigate requirements for additional generation in the future as populations rise, standards of living rise, and consumption rises along with it. Consumers cannot sit by passively anymore - they must become part of the solution through multiple strategies including dynamic pricing, TOU, load control, demand response, distributed generation, and the list goes on. Automation and hardening will certainly improve reliability and outages and volt/var can positively contribute to efficiency and consumption deferral. But to defer additional generation investment, even if for just the short term, other consumer-engaging strategies will be required. - Michael P.

Change requirements are not one-sided

- Jul 17, 2012 - 9:02 PM

Michael,

Thanks for taking the time to read and comment. I agree that "utilities must undertake initiatives on both sides of the equation." And you are correct, there are many methods and tools that utilities can and should be using to monitor and manage load as well as supply. I just believe that utilities, through a truly smart grid, can effect the optimum outcomes without requiring customers to become experts in energy supply, demand and pricing or to become full time operators of the consumption side of the grid to ensure economy, efficiency, reliability, sustainability, etc.. The whole critical peak pricing / demand response scheme seems to me to be a form of wartime rationing caused by our inability to design, deploy and operate a smart grid that can provide adequate economy, efficiency, reliability, security, safety, convenience and service to consumers. We are almost certainly going to have a transition period while we transform the national grid in which consumers are going to experience constraints in supply and restrictions in consumption. That's what happens during a natural disaster like a drought or an economic disaster like a fuel embargo or a political disaster like a war. But those are temporary hardships. We won't ever make consumers electric utility experts any more than we will make them experts in the auto industry, the airline industry, the Internet or medical care. They don't sit passively by, they seek, purchase and consume products and services that they want and need. They are consumption experts! Some of them may choose to exert considerable self discipline in when and how they consume for financial reasons or health concerns or in the interest of the public good. As to your final pont, we will indeed ultimately require additional generation capacity in this country, and orders of magnitude more in the world. Will we do it the same way that we did for the past 130 years via a centralized, monolithic, intractable grid, or will we find a new and better way. I firmly believe in the latter.

Well said

- Jul 17, 2012 - 3:14 PM

Michael P.,

Perhaps you'd like to ghost write my column for the rest of the week.... you make a very cogent argument that a dual strategy -- one on both sides of the meter -- is the best approach. Agreed, demand will rise and largely automated management on the customer side need not impact comfort or convenience -- those who bemoan doing laundry at midnight are reciting antiquated fears that have long ago been solved.

Yes to utilities; yes to consumers

- Jul 17, 2012 - 9:39 AM

I agree that smart grids and utility-side efforts are important. It's OK to state that, "I think that most customers really have little interest in spending much time or effort changing how and when they use electricity." So what? Why is that relevant?

(1) Some consumers will participate; (2) the grid becomes more resilient and reliable when consumers respond to price and relaibility/emergency signals; (3) competition is enhanced: rather than only supply-side options, we have competition during peak periods, high price periods and to manage ramping of wind and so forth; (4) the price elasticity of a few people will benefit everyone on the grid; (5) restrictions on demand participation -- either deliberate or through laziness regarding the updating of rules and protocols -- are anti-competitive; (6) investments on consumer premises are local investments, and a broader definition of "investing in the grid" is healthy; (7) innovators, entrepreneurs and communications technologists will facilitate these changes" they are transforming the electric industry in the same way that cogeneration transformed the indsutry in the 1980s.

Consumers are smart; consumers can learn; consumers know what they want far better than any utility expert or well-intentioned regulator. Consumers are central to the future of the electric industry.

Contact

- Jul 24, 2012 - 9:08 PM

When I wrote the comment "Yes to utilities; yes to consumers" on July 17, 2012 at 9:39 AM, I assumed my sign-in name would automatically appear. It did not, so here it is. Thanks to Steven and Phil for the replies.

Yes to utilities; yes to consumers

- Jul 17, 2012 - 10:10 PM

Thanks for reading and responding. We are almost entirely on the same wavelength. I absolutely believe that monitoring and managing consumption is every bit as crucial as monitoring and managing production, transmission and distribution. They question is who will do it and how? I don't think that consumers will by and large solve the problem by significantly changing their lifestyle and behaviour to respond to complex price signals. I believe that it will be accomplished by a new approach in a decentralized grid that is monitored, analyzed and managed from every point of production to every point of consumption. The utillities and a new group of players, unaffectionately referred to by the incumbent utilities as "disintermediaries" but known by customers as "really cool products and services" will make this happen. Consumers will help by purchasing smart devices and apps that enable them to obtain what they want . . . maybe lower power bills . . . maybe less carbon footprint . . . maybe more renewable energy . . . maybe just more power consumption. After all, as you so insightfully point out, "consumers are smart . . know what they want far better than any utility expert or well-intentioned regulator."

Actually...

- Jul 17, 2012 - 3:10 PM

Thanks for shoring up the argument that, in fact, is carrying the day right now and that is informed, opt-in, customer participation. When you look at customer segmentation studies, several of the, say, five customer types are likely to be motivated to participate.

That some customers wish for flat rates and to be "left alone" is okay, because more and more folks will want dynamic rates and the smart thermostat or whatever technology enables automated responses.

To a degree, Steve Collier sets up a few straw men that I don't think will be relevant over time. Just as the simplicity of "environmentalism" -- meaning, don't foul your own nest -- has gone mainstream over 40 years (yes, with extremes on both sides), so energy and electricity literacy will as well, when managing costs (not "saving $$") and aggregate environmental benefits are clear.

I think, despite his central argument, Collier leaves room for the development of automation to assist consumers in participating. Looking back, one can argue that the industry went whole hog on metering before it knew what to tell customers. We're hashing that out now.

Enjoyed this interview -- here's another take

- Jul 17, 2012 - 8:43 AM

Phil, Steve,

I wish you had titled your article, "Change the grid, *and* the customer." Let us remember that the driving purpose behind so-called "behavioral" energy efficiency programs, also known as "customer engagement programs," is to cost-effectively reduce energy usage (for environmental benefits, energy security benefits, as well as to reduce longer-term costs, e.g., through deferred or avoided capital outlays). While Steve seems to be suggesting that a smarter grid is an alternative to consumer energy-saving action, I view it instead as a complement. The "black box" that Steve envisions does not exist today, but customer engagement programs—and especially those that employ sophisticated computer software—are helping consumers identify the energy-saving opportunities they desire to save money, earn reward points, or reduce their impact on the environment. The promise of the smart grid is in helping utilities operate more efficiently, fostering innovation in the way our devices communicate, *and* leveraging real-time data flows to provide consumers with the feedback they need to make informed energy decisions. For any readers who have not seen Phil's excellent July 10th & 11th articles on regulatory barriers to smart grid investment, I encourage you to check them out.

. . . here's another take

- Jul 17, 2012 - 10:07 PM

Joel,

Thanks for taking the time to read and respond.

I'm not opposed to "change the grid and the customer." I just think that, so far, the overwhelming emphasis in the discussion and deployment of the Smart Grid has been on smart meters, meter data management systems, critical peak pricing and demand response. That alone is not a smart grid.

I don't disagree that there is a significant number of customers who are willing and able to make "informed energy decisions." And there are definitely some great companies out there that are deploying "customer engagement programs . . . that employ sophisticated computer software" as well as on-premises monitoring and control to make it easy for customers to achieve conservation and/or demand management objectives. In fact, the best ones essentially make the conservation and peak demand reduction invisible to the customer. Even so, their experience is that only a fraction of customers of any given utility are willing to opt in, and only a portion of those signed up participate at a level that makes a significant difference in their patterns or magnitude of consumption.

There is so much more possible than this. For example, universal adoption of distributed volt / VAR monitoring and control throughout the grid could result in more conservation and demand reduction than has been effected in all the demand response programs implemented to date . . . and with no expertise, effort, inconvenience or risk of increased power bills required on the part of the cusotmer . . . and with significant improvment of the quality of power service to customers . . . and substantial improvement in utilities' ability to monitor and manage their distribution systems. Sure, it would require some capital investment, and it would require substantial changes in the way utilities plan and operate their distribution systems. And, as you say, there are formidable regulatory constraints.

Voltage optimization is just one of many new methods and approaches to a truly smart gird that can benefit every consumer across the board. Because we've continued to pin our hopes onthe supply side philosophy, we've waited way too long to do everything that we can do to transform the grid into a Smart Grid and to adopt methods for planning and operations that fully leverage a Smart Grid. As a result, we are behind the eight ball so to speak and are likely to need substantial "customer energy saving action," maybe even through involuntary blackouts and brownouts, until we catch up.

We have to catch up. And we have to do it by changing the grid, not just the customer.

I hear ya...

- Jul 17, 2012 - 3:01 PM

Joel,

Thanks for your thoughts. I agree the "and" would be appropriate. Why not engage customers who want engagement and leave the rest alone? Opt-in dynamic rates, demand response or just modifying a thermostat to shave use in the peak are all welcome and many of us would do it if the cost or benefit was minimal, but the impact in aggregate made a difference, say, environmentally.

Three Cheers, Three Steps for Greater Reliability

- Jul 17, 2012 - 5:48 AM

Three Cheers for a great interview, and my hat's off to Steve Collier for his comments and especially, his conclusion.

Three Steps for Greater Reliability are easy to remember: 1) Modernization, including Outage Management Systems - utilities should focus on what they control, setting priorities on what has a higher chance of success, namely, outage automation and grid modernization; 2) Hardening - as we modernize, utiliites should evaluate the softest, most vulnerable spots in the grid and harden them, including undergrounding and greater protection of substations; and 3) Decentralization - as distributed energy technologies drop in cost and increase in capabilities, utilities should incorporate them more and more into our grid, creating a hybrid energy economy that benefits from the best qualitites of both centralization and decentralization.

Three Thanks, Three Steps for a Better Grid

- Jul 17, 2012 - 10:06 PM

John,

Thanks for the kudos. And thanks for endorsing the need for foundational changes to the grid itself.

I don't think that greater reliability is necessarily the only or even primary goal. Obviously we want to maintain and improve reliability, maybe to the point of the Perfect Power envisioned by the late Bob Galvin. The real goal, however, is to have a grid that can meet the needs of our citizens and businesses in a way that continues to facitate the highest quality of life and productivity of business possible. That means a combination of reliability, economy, efficiency, safety, security, convenience, sustainability, flexibility (not just hardening), and quality of service.

As far as the best qualities of both centralization and decentralization, I strongly favor the characteristics of the starfish over the spider?

Good stuff...

- Jul 17, 2012 - 2:57 PM

John,

I appreciate your readership and I can always count on your avid interest for sentences such as your remark: "As distributed energy technologies drop in cost and increase in capabilities, utilities should incorporate them more and more into our grid, creating a hybrid energy economy that benefits from the best qualitites of both centralization and decentralization."

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